Updated: Sep 22
COVID-19 has affected the global economy at a larger scale. The initial impact can be seen for at-least a quarter period of the business (up to two quarter assuming COVID-19 to be controlled by mid-June) in most of the cases of sectors across the global market. The global paints and coatings market which was estimated to be about USD 152.10 billion in 2019 will see a drastic fall in 2020 with a sluggish decline of over 11.18% to about USD 135.09 billion, i.e. at-least a decline of USD 17 billion y-o-y as per the current forecast.
The global paints and coatings market will have impact through different factors in this year. Few of them are:
Raw materials supply-demand gap
Price Hike & lower Profit Margin
Production Labor Cost
Diminished demand for Paints & Coatings Products by End-User Industries/Consumers (Lock-down situation in countries across the globe)
International Trade & Transportation Issues across the countries.
The most commonly used pigment is TiO2 (titanium dioxide), and about 58.5% of total Titanium dioxide market was consumed by paints & coatings manufacturers in 2019. In 2020, the production estimates of TiO2 will declined by atleast 30% which will impact the supply-demand gap. The European countries which are dependant on imports of TiO2 from China and other Asian countries will have the larger impact. India which is a net importer of TiO2 will have to utilise its own TiO2 resources to minimise the supply-demand gap scenario. TiO2 is used as pigment due to its whiteness, opacity and refractive index ability. It is commercially available in two grades- Anatase and Rutile. Rutile is higher in price and has more durability & stability, and more efficient than Anatese grade. TiO2 pigment accounts approximately 25% of the total paints/coatings content. So the changes in price of TiO2 will be one of the major factor to impact on price fluctuation of paints and coatings products in the upcoming years.
Due to the COVID-19, the countries has adopted the lock down method to suppress the spread of the virus and control the pandemic. The paints and coatings business is directly linked to the raw material suppliers (pigment, solvent, binders, and additives) to the sales and distribution retail channels or to the industrial businesses such as (oil & gas, pipeline, automotive, building & construction, general industrial, packaging, aerospace, etc.).
Global paints and coatings market in each end-user industries will slump by more than 10% and architectural coatings will have the highest decline rate in 2020 as shown in adjacent figure. As per the current forecast, the market will take at least 3 years to re-gain the level of consumption in 2019.
The production cost of the paints and coatings differs in each region by proportions of each contributions by raw material cost, employee cost, administration cost, electricity/utility cost, selling & distribution cost, & other cost (including R&D).
Table: Paints & Coatings Production Cost Components: Percentage Range by Region, 2019 (Based on data available for Top Paints and Coatings Manufacturers in each region)
As soon as the COVID-19 be controlled, the global economy will regain its growth curve towards the sustainable growth with holistic approaches for better development. Paints and coatings signifies the beauty & colour of nature as well as the protection that is required from external and outreach conditions. From this COVID-19, the one important lesson that can be taken is to operate businesses with cost-effective models with evaluating & sustain the nature (environment) and preventing the future epidemic scenario to save economy and thousands of lives.
About the Author & Disclaimer: Aditya Kaushal has got about 4 years of experience in market research mainly in chemicals and materials industry. He has also learned and experienced about the social development sector. The article published here is his part of independent research work and analysis through publicly available data and sources. The market sizes or data available here are published after a thorough analysis, and the views and opinions are those of the author. It does not reflect the official policy or position of the any company or organisation. Assumptions made in the analysis are sole reflection of the author’s view and does not reflect any position of the other entity. The author is not to be held responsible for any misuse, reuse, and cited and/or not quoted copies of content. For currency conversion, the average conversion rate of unit is taken for the year.
The full data coverage includes the country wise market sizing and forecast for 2014–24 and also it covers the market size by end-user industry by country. The countries included are:
1. Asia-Pacific- China, India, Japan, South Korea, Indonesia, Thailand, Philippines, Vietnam, Rest of ASEAN, Australia & New Zealand, and Rest of Asia-Pacific.
2. North America: United States, Canada, Mexico, Rest of North America
3. South America: Brazil, Argentina, Colombia, Rest of South America
4. Europe: Germany, United Kingdom, France, Italy, Spain, Russia, the Netherlands, Ireland, Belgium, Poland, Finland, Sweden ,Turkey, and Rest of Europe
5. Middle-east & Africa: Saudi Arabia, UAE, Qatar, Kuwait, Iran, South Africa, Egypt, Nigeria, and rest of Middle-east & Africa.